Scheme for a state bonus [microform]; a rational method of solving the social problem

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Box 873

Milner, E Mabel

SGlie?r,e for 9. state honns; a rational method
of solving the social problem, Ir/ Mabel &
Dennis Milner^ Priestgate, Darlingbon, Iloi’th
of England Ilevcpaper Go,. 1916,

16 p.

Insurnn.ce. • G-t. Pyrit, I, Milner,

Dennis. jt, au.

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SCHEME

FOR A

STATE BONUS

A RATIONAL METHOD OF SOLVING

THE SOCIAL PROBLEM

E. MA15EL & DENNIS MILNER, li.Sc., A.C.G.I

Printed by the North of England Newspaper Co

Priest^atc, Darlington,

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SCHEME FOR A

STATE BONUS.

57 505D

OBJECT.

To solve the Social Problem,

Probably the most generally acceptable definition of the
Social Problem is the widespread unhappiness of the poorer
classes, seen most strikingly in the squalor and wretchedness
ofthe slums, and forced on our attention most by the prevalence
of industrial unrest, leading constantly to strikes and even
violence.

All of us are expecting to see big reforms in housing,
education, and the organisation of industry, but the whole
social question is now so complicated that we recognise that
none of these reforms, nor all of them together, deal adequately
Avith the difficulties and dangers of the immediate situation.
Moreover, the question is now so pressing that even were
these reforms adequate in themselves, they could not be put
into effectiA’^e operation before the situation becomes un-
manageable, or the dangers are increased by the outbreak of
Peace.

In other Avords, if the solution is to be adequate it must be—

(1) So comprehensive that it Avill remove the Avide-
spread dissatisfaction. Therefore it must benefit
cA'eryone, in such a Avay that the most ignorant
can understand and appreciate the benefit, at
once. On the other hand, it miist not dislocate
the existing industrial organisation or endanger
the good of all in the interests of any class,
hoAV'CA’cr large ; this is the more important since
urgency demands that it should be applied during
the War,

(2) So simple and require so little ncAv machinery
that it can be applied at once.

Reading the summary of the Commission of Enquiry into
Industrial Unrest confirms the strong belief that the removal
of this AA’idespread dissatisfaction inA oh^es —

(1) Money. SomehoAV incomes must be butter

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proportioned to the expenditures they have to
meet.

(2) Confidence. The growing lack of confidence in
Government methods would be most speedily
allayed by a solution which affected personally
each individual of the community, if possible by

an appeal through the family unit.

(3) Industry. Better relations must be established
betw'ecn the various parties in industry. Much
good is being done by the gradual introduction
of the plans outlined in the Whitley Report, but
these adv ances arc gradual, and in the meantime
some j lister method of money payment in all
trades and in all classes is essential.

The Scheme for a State Bonus is an attempt to outline a
method of dealing with the problem in a simple, direct, and yet
comprehensive way : suitable for immediate legislation, yet

making a fundamental change in our social relationships.

It appeals to the family unit by making for a juster proportioning
of money payment to the needs of the family, and by so doing
will re-estabiish confidence, not onh^ in the State organisation
but between all classes.

The following four examples remind us of the extraordinary
difficulties of the jjroblems to be solved, at the same time
indicating the relation of money to the personal and industrial
problems : — i

1. We are well aware that children cannot choose to
whom they will be born, so that we cannot hold
them responsible for the success or failure of their i
fathers in earning money. Yet we know that the
inequality of opportunity resulting from this cause

is a grave menace to the health and development
of the race, and leads directly to the suggestion
that children are entitled to some “ pay,” which is ^
theirs, regardless of their parentage.

2. It is customary for employers to pay the same wage
for the same work, whether it is done by a single
man or a married man, or, in the case of female *
workers, whether it is done by a single woman or a
widow with many childi'en. The mere statement of
this fact is sufficient to remind us that the employer
can do no other, but, obvioush^, it is not an equitable
arrangement.

If vv'ages are to take account of a man’s family.

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and if the employer cannot make this allowance,
it is necessary for some independent agent to take
action. Something, therefore, very like a soldier’s
sejjai’ation allovv'ance (which already applies to about
half the population) is required for all families.

.3. Civilisation has agreed that members of modern
communities must not be allowed to starve, without
a chance to earn at least food and shelter, thus we
have in England a Poor Law system which guarantees
phvsical life to all, though some die rather than
accept the humiliating conditions which are imposed.
In fact it is true that nearly all our charities, by
insisting that those who receive help must first of
all admit poverty, withhold help from the more
deserving, who know they would not be benefited,
in the long run, by a dole which marks them out as

paupers.

Thus we give our help to the undcservmg and to a
few of the deserving, provided they arc destitute,
but deny it to all others.

For instance : one man saves jjatiently, puts his
money into industry or the Post Office, and therefore
gets no pension ; another man spends recklessly,
and so at 70 is poor enough to qualify for a State
Pension. The less he has saved, the more he gets.

Yet the drunkard has no better right to a pension
than the thrifty : if we giv’e to the one we must
giv’e to both. The same applies to most charities :
if we give to those who are so poor they must confess
it or die, we must be willing to give to all those
who arc not prepared to beg or prove their need
publicly; the idler must not get more from his
fellows' than he who works or saves. But if we
want to give help to the latter we must do it without
questions and without poverty tests, namely, give
equally to all.

4. Despite our belief that the competitive system
rewards individuals in proportion to the services
which they render, and presumably with some refer-
ence to the disagreeableness of the tasks undertaken,
J. S. Mill had to admit, in 1852, that this principle
only applied to the higher grades of employment,
and that in the case of the very poor man the
imminence of destitution caused him to accept
exceedingly low wages for exceedingly disagreeable

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work. If the principle, of pay being proportional
to the services rendered, broke down, it was because
of the existence of classes of men who, when they
sought eni})loyment, were cither destitute or in
immediate danger of destitution ; they had therefore
to accept what terms were offered them.

In order to complete the working of this principle
for everyone, it is only necessary to remove these
classes, or, rather, the destitution which they fear.

The conclusions from these four striking examples, of ways
in which our social arrangements arc wrong, are summarised
below and lead us stage by stage to the solution which follows :

1. Children have the right to life irrespective of the
earning capacity of their parents.

2. Industry cannot equalise the burdens between single
and married men, sjjinsters, widows, etc. Therefoi'e
the Community must make some provision for evciy-
one such as the soldier’s se|)aration allowance.

3. The Community should help all alike, not only those
who have failed to help themselves.

4. No one should be driven by the threat of destitution
into accepting work which is underpaid, unhealthy,
or even dangerous. Therefore destitution must not
exist.

The shame is that these faults in our system react chiefly
upon the children of the poor, next uj)on all women, and last
and least upon men. It is obviously Avrong that men who
control nearh^ all material Avealth should suffer least from
its bad distribution.

Clearly the aboA'e problems, apart from the many that
haA’e not been referred to, are not simply material questions
capable of being suddenly set right ly material means, but
in each, lying at the root, there is an economic factor, the
removal of Avhich Avould begin to change the Avhole system.

The proposal here outlined sets right this economic factor,
strikes at the root of all these problems, and by so doing enables
men and AAmmen to set themselves right. It also alloAA's all
those imjjrovements in housing, education and morals, W'hich
are so vitally important in their effect on the lives of those
they benefit, to become permanent improvements.

This scheme is not antagonistic to other methods of
reform, but is essentiall}^ a first step : creating a ncAV leaven
of freedom and security Avhich AAall permeate our Avhole social
system, and thus give time for the jAroper consideration of
detailed Reconstruction.

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PROPOSED STATE BONUS.

It is suggested —

(fl) That cA'ery individual, all the time, should receiA e
from a central fund some small allowance in
money Avhich aaouM be just sufficient to maintain
life and libertv if all else failed.

(b) That as ev eryone is to get a share from this central
fund, so everyone Avho has any income at all should
contribute a share each in proportion to his
capacity.

(a) THE ALLOWANCE RECEIVED.

1. The first essential of this alloAvance is that it must be
just sufficient to maintain life and liberty. It folloAvs, therefore,
that it will have to be based on the primal needs of individuals
(AAdiich are nearly the same for all), namely, food, shelter,
and a minimum of recreation, say, for instance, AA’hat could be
bought before the War for 5j- a Aveek.

2. The next essential is that this amount — whatever is
decided on as just sufficient — must be absolutely dependable.
Every man, every Avoman, and every child must havx it in their
oAA'n right ; it must be theirs irrespective of the faults and
errors of the past, making it possible for the fallen to start
out on life again Avith a neAv hope ; it must be clear of all
taxes and legal obligations. It must be ours like the air and the
sunshine.

3. On the other hand, it must not be too much, since
some are lazy, and if luxury Avere possible Avithout AAork,
they Avould be glad of the opportunity to rest. Of course,
if many Avere idle the contributions to the central fund AAOidd
be reduced and the Bonus correspondingly reduced. It must
also be noticed that there would be no inducement to be idle,
because the idle Avould only get their Bonus, Avhereas those
AA'ho AA'ork AA'ould get their earnings in addition. Compare this
AA’ith example 3 aboAX.

4. As the Bonus is intended to take the place of all Poor
LaAv relief, it must be given at such short periods — say Aveekly —
that spendthrifts Avill not have to starve too long. There
must be no more begging.

5. The distribution could be very simply done through
the Post Office in a similar Avay to the separation allowances.
Old Age Pensions, etc., and need not involve inconvenience
to individuals or expense to the State. Presumably mothers
or guardians would receive the money for children under 14,

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the legal school-leaving age. Money not applied for could be
automatically transferred to Post Office Savings Bank accounts.

(b) THE CONTRtBUTION.

1. The first essential of the contribution is that it should
be from everyone, with any income at all. While this woidd
not in any way reduce the absolute guarantee of life and
liberty, it means that the Bonus woidd not come as a sudden
net addition to w'ages ; also it means that the transfer of money
from rich to poor would be reduced to a minimum. It cannot
be too clearly stated that the object of the Bonus is to introduce
this feeling of security, not to make an arbitrary addition to
wages. It is, in short, a very comprehensive insurance scheme.
Therefore, as with other insurance schemes, the contributions
must be from all, while the benefit would be most felt by those
in need.

2. The contribution must also be simple to collect, requiring
if possible no new machiner^^

3. The contribution should be arranged so that the fund
automatically increases w'ith prices, thus standardising the
purchasing value of the Bonus.

4. All these points would be met by pooling a fixed per-
centage of all incomes — earned and unearned — by deduction
at source.

The State is the obvious organisation to raise and distribute
such a pool on behalf of the Community.

5. The collection of this money would be fairly simple:

A very large proportion of the pool would be raised on
money which is paid as wages and salaries : the part going to
the State would be deducted from the wage, the receipt for
this deduction being paid to the worker as a cancelled stamp.

Another large proportion woidd be raised, as the Income
Tax now is, by deduction at source on dividends and profits
from industry. This and the previous portion of the pool
could be raised without much difficulty.

The remainder would present more difficulty, as it w'ould
have to be raised from small trades people, from farmers, etc.,
and w'ould involve a great deal of candid assessment. There
are about a million people in England and Wales employed
in this w^ay, but many of these people already come under
review for Income Tax purposes.

The whole cost of this collection is not likely to be more
than £2 million per annum — half the amount now' spent on
collecting the Health Insurance contributions.

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6. In round numbers 5/- a week per head would mean
£470 million per annum for England and Wales. This allow-
ance w'ould do away w'ith the need for public charities (such
as Old Age Pensions, Poor Law', Health Insurance, etc.) to
the extent of over £70 million per annum. This leaves a net
sum to be raised annually of £400 million, w'hen all allowances
for the cost of collection and distribution have been made:
this is about one-fifth of the annual National Income or sum
of all the incomes of persons in England and Wales before
the War. (Census of Production, 1907, etc.)

SUMMARY. !

We have now' arrived at an equal distribution of 5/- (pre-
War) per head for all persons, to be provided from a pool j

maintained by everyone contributing 20% of their incomes. "

Moreover, it is essential that the purchasing value of the
Bonus should be standardised without constant legislation. /

If prices rise 10%, the pool must rise 10%, so that the Bonus )

may still buy the primal necessities of life. Therefore the ,

20% once arrived at should be a fixed percentage, so that the j

})Ool would vary with the National Income and thus with the f

fluctuations of the purchasing power of money. j

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MAIN EFFECTS CLAIMED.

1 . It will be clear from the above that the proposal is
really a simple and comprehensive insurance scheme, with
continuous benefit, so that this sum of £400 million will not
be transferred from rich to ])oor, but will be taken from people
with fluctuating incomes (all of us) and given back to everyone
as a regular fixed weekly payment. Like all insurance schemes
the contributions will be from all, and the benefits will be
most felt by people when they are in need.

This means that incomes will be divided into two portions :

(rt) A regular payment which will cover primal needs,
such as food and clothing.

(b) A variable payment which will be given, as at
present, in return for the services sold in the
open market.

Note that the immediate result of this guarantee of the
primal necessities of life will be to abolish the chief excuses
there may be for begging, petty theft, the under feeding of
children, and all the minor deceits that are covered by such
phrases as “ business is business ” and “ a man must live.”

Note also that to the 87% of the population who had
incomes of less than £160 per annum per average family of
5 before the War, the Community will be insiiring the continu-
ance during unemployment of £65 per annum, or 2-5ths of their
normal incomes : and at death £52 ])er annum, or l-3rd of
their normal incomes.

2. This Scheme is a frank recognition that there is an
clement of Communism underlying many of our existing
social arrangements — such as the Poor Law, Health Insurance,
Charities, etc. It attempts to apply this moderate Communism
more effectively, and should be contrasted with the suggestions
which are being made for comjficte socialistic schemes, to be
arrived at by revolutionary methods.

We see to-day in Russia the tragedy of au attempt to
readjust the Social Order by methods not sanctioned by public
opinion. The inevitable sequence following upon such revolu-
tionary methods is — weakening of leadership, mob rule, chaos.

3. Unfortunately taxation is already very heavy, and
will get heavier, but it is not raised with the object of solving
industrial unrest, so that it is clear that if money is required
in the removal of this unrest, it must be an additional charge
upon the incomes that remain. In order to understand the
real cost of this Scheme to individuals let us take the example

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of a man having an income of £500 per annum before the War
and before the deduction of any taxes:

Income from all sources (earned and unearned) £500 j).a.

The contribution of 20% to the central fund

for this Scheme ... ... ••• ... £100 p.a.

An average family of 5 would receive in Bonus £65 p.a.

The Bonus would also give benefits, for which
a man, say 35 years old, in such a
position would ordinarily be paying in
Insurance Premiums (such as Life In-
surance, Sickness, Accident, Deferred
Annuities, etc.) at least ... ... ... £45 p.a.

Thus the family would receive a total financial

benefit of £65-1- £45 ••• ••• £110 p.a.

That is, a man in this position will benefit to the extent
of £10 per annum.

Further examples of the net financial effect on individuals
are as follows : —

Single men or women

per annum will get in Bonus more than they pay to
the pool — a clear cash gain. And they will gain
financially up to an income of at least £110 per annum,
if allowance is made for the insurance benefits.

A man and wife whose joint income is less than
£130 per annum will get in Bonus more than they pay
to the ])ool — a clear cash gain. And they will gain
financially up to an income of at least £220 per annum,
if allowance is made for the insurance benefits.

An average family (of 5) whose joint income is
less than £325 per annum will get in Bonus more than
they pay to the pool — a clear cash gain. And they
will gain financially up to an income of at least £550
per annum, if allowance is made for the insurance
benefits. And even a family with an income of
£l,000 per annum will only lose financially to the
extent of £90 per annum or 1 lOd. in the £.

N.B. — All the above incomes should be doubled at the
present time (June, 1918) to allow for the depreciation in the
value of money and the consequent doubling of the Bonus.
For exam})lc, a family of 5 with a present income of £2,000
per annum woidd lose about £180 per annum, or only 1,1 Od.
in the £ ! The reasons for using pre-War figures are that
they are more easily available, and are not constant!}’ changing.

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About 90% of the people in England and Wales have
incomes of less than £550 per annum for an average family of
5, and will therefore be in a better financial position as a result
of the Bonus.

4. The remaining 10% who have incomes Of more than
£550 per annum will lose financially in proportion to their
incomes, but they are chiefly people who can appreciate the
other advantages of the Scheme.

Most people in this class fall under one or more of the
following heads: —

(a) Employers. These will gain at once by the increase
in the general satisfaction of all the workers, and
the consecpient reduction in strikes and trade
disputes which now absorb so much time.

It should also be noted that minimum wages
and other restrictions on competition are rapidly
being introduced, so that it is clear that the profits
of industrv are in any case going to be interfered
with in the interests of the workers. This Scheme
in no way interferes with the right of employers
and individuals to bargain about wages; it merely
insures that the worker shall be in a fairer position
for bargaining. This is what the worker wants.

Better wages will mean a greater demand for
necessities, and thus a steadier trade in all the
staple industries. It will also help the small
trader to sell his goods, and will absorb much of
the ovcr-])roduetion which now hampers the proper
development of manufacture.

Better wages will also mean, in the future,
healthier workers, with all that that involves.

It is, moreover, an advantage to the employer
that the Bonus should be different for married
and single men, so that the inducement to work
for a 30 - wage will be about the same for a married
or single man. This is scientific wage paying.

The Scheme is also a sim}>le yet complete profit-
and-loss sharing system, giving all a direct interest
in the efliciency and j^roductivity of industry,
and the abolition of restrictions on output, since
20% of the product is pooled for the benefit of all.
Nor does it involve any disorganisation of existing
systems.

{b) People with many Dependants. Many rich people
help to maintain more than an average family
of 5 — their own families, their relatives, friends.

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and old servants — so that projier allowance should
be made for the deductions they may reasonably
make from these demands on their incomes.

Then, although the Scheme only provides a
minimum subsistence allowance, it has been shown
above how it will be a financial benefit to all who
are in receipt of incomes of less than £550 per
annum for an average family of 5 ; in other words,
it guarantees help to all those whose incomes fall
below this standard.

The value of this is perhaj)s best understood by
considering the help it will be to the children and
grandchildren just beginning to set up for them-
selves, and indeed it would mean setting aside a
large eapital sum in order to provide even this
small Bonus allowance for the grandchildren and
great grandchildren of a large family.

(c) Humanitarians. It is idle to suppose that most
persons would not willingly part with a fifth of
their incomes if they could be assured that star^ a-
tion would be abolished, that beggars would not
exist, that the rcsjionsibility for the existence of
slums was no longer theirs, and that the burden on
large families would be relieved. Note also that
the cost of getting £470 million distributed by this
method will only be, say, £2 million, or i% of the
fund, whereas in the case of the Poor Law something
like 75% is absorbed in organisation and only 25%
reaches the pauj)er !

The Bonus will make it possible for children to
stay longer at school and continuation classes.
It will always give the fallen man a chance to rise.
It will prevent married men from falling below their
bachelor standard of living.

Women will he freer to make proper choice about
marriage, because they will be less economically
dependent. Alfred Bussell Wallace believed this
to be of great importance in race development.
They will also be freer because of the assurance of
help' from the Community in maintaining their
families.

When everyone is secure at least of subsistence
pay, we may surely hope to see people less engrossed
in their material prosperity, thus the Bonus will
release many of the higher and nobler aspirations,
which cannot be valued in terms ol money.

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5. Many people will at once foretell an increase in slacking ;
yet the people who do no work at all are already able to get
State or charitable assistance. The workhouse attempts to
enforce useful work, but does not press it to the point of starva-
tion, nor is the work very useful ; while most charities are
even less successful.

Then, again, persuading people to work is an educational
problem. Starvation must not be used as an educative force,
for it only makes inefficient workers. Even the slave-owner
(rives his slaves food and shelter before applying the whip.

Of the wisdom of maintaining people in health by proper
nourishment, before attempting to induce them to work, there
can be no question : every soldier is so maintained, in Peace
and in War, in the sure knowledge that when the time comes
he will do his best.

This Scheme frankly acknowledges that in order to produce
a healthy race everyone must have access to the primal
necessities of life, namely, food, shelter, and liberty. Then,
in order to encourage work it will be necessary to offer proper
inducements, such as just pay, proper conditions of labour,
public opinion, patriotism, and the common welfare. Of
course, the best work will still be done by those actuated by
high motives, among which must be included genius and a
man’s love for his family.

Furthermore, on a point of justice most people are agreed
that evei’vone ought to have access to the land, but it is clear
that in our existing civilisation this right is denied, so that it
would seem onlv reasonable for Civilisation to give in exchange
the cash equivalent of what a man could grow with very little
effort. Obviously giving the equivalent in cash is a great deal
simpler than reorganising our whole land system 1

6. Others claim that there is a moral value in poverty,
both to the poor and to those who assist them. Yet there is
abundant evidence that those who live in “ want and the
fear of want ” are cramped in their sjjiritual outlook, and the
few who are virtuous would be so under any circumstances.
On the other hand, those who minister to the needs of the
poor will find ample scope for their efforts when the merely
economic factor in destitution is removed.

Surely this economic minimum is a first step to the
realisation of any spiritual advance. “ Great are the uses of
adversity ” — but even the preacher has his breakfast.

7. Everyone will receive their equal share of the ]x>ol,
formed by the contribution of l-.5th of all incomes, therefore

the more people contributing to this pool the better. It is

most important that this should be realised before the War
ends, so that there may be no suggestion of ill-feeling about

(a) Women who stay in industry, and thus are able to
contribute to the pool ;

(b) The greater number of men Mho Mali be avilable

for work, and thus be able to contribute to the
pool ;

(c) Those people Mfiio Mall be doing their utmost to
organise these men and M'omen for greater produc-
tion, and therefore for greater contributions to
the pool.

Without some such Scheme of National Profit-sharing
these three classes Mali be the cause of serious disorganisation
and ill-feeling. The distribution of this Bonus on National
Production Mill help to maintain the unity of jnirpose Mhich
has been developed by the War, because it perpetuates the
idea of each for all and all for each.”

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CONCLUSION.

It is impossible to appeal to all shades of opinion by one
line of argument, but this Scheme has not been worked out
for the benefit of one class more than another, and it is hoped
that enough has been said to indicate its value to all.

To the economic failure it offers life and liberty. This
means that for every man with a moderate income there ^yill
alwavs be in the back of his mind a sense of security, '\^hich
will niake for greater stability throughout the whole of industry ;
and for the fallen there will be fresh hope.

It removes from all the fear that Peace vill biing
dislocation accompanied by strikes and further restrictions on
personal liberty, and ensures that no mistakes in demobdismg
will lead to the destitution of anyone.

For the children it means more equal opportunities lor
development ; to their parents, less anxiety and less difficulty
in meeting the growing expenses.

It removes, for all of us, the reproach of the existence

in our midst of extreme and dire po\ erty.

In short, it makes men and women, rather than materials,

the basis of Keconstruction.

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Further copies, leaflets, and other information can be obtained
from Ilartsidc, New Farswick, \ ork.

BONUS i Victoria Stre et juondca